RJ v. Cigna Behavioral Health, Inc.

Background

This putative class action concerns alleged underpayment of out-of-network intensive outpatient behavioral-health claims. RJ, LW, and DS alleged that their employee-benefit plans required reimbursement at usual, customary, and reasonable rates, which the complaint equated with the plans’ maximum reimbursable charge. They alleged that Cigna approved their claims but paid substantially less by using a repricing methodology associated with Viant and MultiPlan. The plaintiffs alleged that they paid the unpaid portions to their providers.

The amended complaint asserted claims under the Racketeer Influenced and Corrupt Organizations Act (RICO), including claims based on mail fraud, wire fraud, and money laundering; claims under the Employee Retirement Income Security Act (ERISA) for underpayment of benefits and breach of plan provisions; and claims alleging breaches of fiduciary duties by Cigna and MultiPlan.

Rule 12(b)(6) Standard

The court evaluated whether the amended complaint stated legally recognizable claims supported by enough factual allegations to make liability plausible. It generally accepted well-pleaded factual allegations as true and applied the heightened particularity requirement to allegations sounding in fraud.

RICO Claims

The court held that the plaintiffs plausibly alleged RICO claims based on mail and wire fraud. It rejected Cigna’s argument that the plaintiffs had to allege reasonable reliance on a specific promise to pay as an element of those RICO claims. The court found that the three alleged verification-of-benefits calls were pleaded with sufficient detail and could constitute the required predicate acts. The allegations also plausibly supported an inference of fraudulent intent, including the alleged lack of disclosure about repricing and the large difference between the defendants’ payment rates and the provider’s charges and benchmark rates.

The court also found that the plaintiffs plausibly alleged an association-in-fact RICO enterprise involving Cigna and MultiPlan. The amended complaint alleged more than an ordinary contractual relationship, including collaboration on a repricing methodology, target rates, communications about lowering payments, and a common purpose of keeping reimbursements low. The court further found that LW and DS adequately alleged RICO injuries because the complaint stated that the plaintiffs paid the underpayment amounts from their own funds.

The court dismissed the RICO claims to the extent they were based on money laundering. The amended complaint referred generally to “Federal Health Offenses” without identifying the specific offenses allegedly producing the proceeds, and it did not plausibly allege that the defendants designed financial transactions to conceal the source or ownership of those proceeds. The court also held that the RICO-conspiracy claim survived to the extent it was based on mail and wire fraud but failed to the extent it was based on money laundering.

LW’s Forum-Selection Clause

The court enforced a forum-selection clause in LW’s health-benefit plan requiring actions connected with the plan to be brought in the United States District Court for the Western District of Tennessee. The court held that a motion to dismiss could be used to enforce the clause, that the clause was part of the plan, and that ERISA did not make it unenforceable. The plaintiffs had not shown that requiring LW to litigate in Tennessee would effectively deny her access to court. The court also concluded that the clause applied regardless of which parties were named as defendants.

MultiPlan’s Fiduciary-Duty Claim

The court denied MultiPlan’s motion to dismiss the sixth claim, which alleged that MultiPlan breached fiduciary duties under ERISA. The allegations concerned more than misrepresentations: they included using an allegedly inadequate or biased reimbursement method and failing to use a database containing representative charges for similar services in the same geographic area. The court found these allegations sufficient to give MultiPlan fair notice of the claim. It also held that the plaintiffs could seek equitable relief under ERISA at the pleading stage, even while pursuing benefit claims, although they could not obtain a double recovery.

Disposition

The court granted in part and denied in part the defendants’ motions to dismiss. The RICO claims based on money laundering were dismissed, LW’s claims were dismissed, and those claims were dismissed without leave to amend because further amendment would be futile. The motions were denied in all other respects.